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Apple Wins Appeal On Damages Award In Business Litigation

Posted on in Business Litigation

In May 2013, a company called Smartflash sued Apple claiming that the California-based company infringed on several of its patents. The business litigation concluded on Feb. 24, when the jury agreed with Smartflash that Apple's iTunes unlawfully used three of its patents. Smartflash was awarded $532.9 million in unpaid royalties by the jury.

Apple appealed the award, contending that the jury might have used the products' entire market value instead of differentiating between features that are subject to patents and those that are not. Apple argued that this would make a substantial difference in the amount of the award. Recently, a federal judge overthrew the jury's award and ordered the trial court presiding over the case to conduct a new trial on damages.

It was the opinion of the judge in the U.S. District Court, Eastern District of Texas, who initially gave instructions to the jury in the first case, that the jury most likely failed to fully understand his instructions regarding the calculation of royalties. He went on to say that his instructions -- even though legally correct -- may not have properly applied to the facts in the Smartflash case. The new trial regarding damages is currently scheduled for Sept. 14.

When business litigation finally goes to trial, it is crucial to be sure that a California jury understands its instructions before making a decision and/or calculating damages. If either party believes that the calculation of damages was incorrect, it may be possible to appeal the award as Apple did in this case. It is not necessary to appeal the determination of liability in order to receive a new trial to determine a new award.

Source: Time, " Apple Does Not Have to Pay $533 Million in iTunes Patent Infringement Case ", Jonathan Stempel, July 8, 2015

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